‘America First’ and the Rise of Chinese Biotech: How New Investment Restrictions Could Reshape the Global Biopharma Industry

The biotech industry's inherently global model for drug development is facing a new challenge, driven not by science, but by an accelerating wave of U.S. trade and investment policy. 

In December 2025, President Donald Trump signed into law the Comprehensive Outbound Investment National Security (COINS) Act, which helped codify and expand a Biden-era outbound investment program. The new act aims to protect U.S. national interests by requiring notification and oversight of certain outbound investments into sensitive foreign sectors, including the People's Republic of China. Though the act currently covers industries such as semiconductors, AI, and supercomputing, it allows flexibility to add additional sectors in the future. 

Now, biotechnology is at the centre of attention.

In early June 2026, lawmakers John Moolenaar (R-MI) and Debbie Dingell (D-MI) introduced the Biotech Investment National Security Act (BINSA), which would amend the COINS Act to include biotechnology as a sector subject to outbound investment screening, along with licensing deals involving technology and intellectual property.

The proposal comes amid an increase in U.S.-China biopharma collaboration and the rapid rise of China's biotechnology sector. Biopharma licensing transactions between the two countries reached approximately $137.7 billion in 2025 in total deal value, including milestone payments and royalties, up from less than $5 billion in 2020. Additionally, 48 per cent of pharma licensing deals of $50 million or more in 2025 were with Chinese counterparties, up from 0% in 2020. The trend has continued into 2026. In May, Pfizer announced a licensing agreement with Innovent Biologics worth up to $10.5 billion, while Bristol Myers Squibb entered a separate collaboration with Hengrui Pharma valued at up to $15.2 billion, deals that BINSA's sponsors have explicitly cited as examples of the trend they seek to regulate.

As Chinese biotechnology becomes increasingly integrated into the global drug development industry, BINSA has sparked a debate across the U.S. biopharma industry: does investment in Chinese biotechnology strengthen or weaken American innovation? 

The Case for Regulation

Supporters of BINSA largely frame biotechnology as a matter of economic and national security.

Moolenaar argues that continued investment into Chinese biotechnology risks "hand[ing] Chinese companies another chokehold over our economy, and hollow[ing] out our nation's research infrastructure." Dingell similarly argues that American investment should not support biotechnology industries that could eventually threaten U.S. economic and national security interests.

Underlying these concerns is the idea that growing dependence on Chinese biotechnology could leave the U.S. vulnerable in the future. As China's biotechnology capabilities continue to expand, policymakers worry that American capital, expertise, and technology may contribute to the development of a future competitor.

Supporters also argue that the issue extends beyond the movement of capital itself. If China continues to strengthen its position within the global biotechnology ecosystem, future dependence on Chinese-developed medicines, manufacturing capacity, or critical technologies could create strategic vulnerabilities and pathways for weaponisation. From this perspective, the concern is not simply that investment is flowing abroad, but that key elements of the biopharma value chain may increasingly reside outside U.S. control. 

From this perspective, restricting outbound investment serves two purposes. First, it limits the transfer of knowledge and resources to a geopolitical rival. Second, it encourages investment to remain within the United States, potentially strengthening domestic research, development, and manufacturing capabilities.

The Case Against Regulation

Critics of BINSA raise two distinct concerns: that restrictions will inflict commercial harm on the domestic biopharma industry, and that the national security risks underpinning the legislation are overstated. 

The modern biopharma industry depends heavily on global collaboration. U.S. venture capital firms increasingly seek opportunities in Chinese biotech assets, while large pharmaceutical companies rely on international partnerships, licensing agreements, and global clinical development networks. Limiting these relationships could make it more difficult for American companies to access promising technologies, optimise development pipelines, and take advantage of the lower costs and faster timelines available in China. Restricting access to these advantages could increase development costs and slow innovation.

Others question whether the national security concerns are being overstated. Biotechnology relies heavily on patents, which provide legal protection for innovations and intellectual property, while companies already employ legal and operational safeguards to mitigate trade-secret risks when operating internationally. Critics argue that biotechnology differs from industries such as semiconductors because its primary outputs are intellectual property rather than physical supply chains. Therefore, patented medicines may offer less geopolitical leverage than strategically important manufactured goods, since patents are publicly disclosed and can, in exceptional circumstances, be bypassed or replicated. 

Critics further argue that biotechnology, unlike many strategically sensitive industries, is built upon a foundation of shared scientific knowledge, international collaboration, and open publication. As a result, scientific expertise and know-how are likely to continue flowing across borders even if investment restrictions are imposed. From this perspective, limiting outbound investment may do less to constrain knowledge transfer than policymakers anticipate. 

Potential Implications in Europe

The implications of BINSA may extend well beyond the two countries at the centre of the debate.

Some analysts have raised the possibility of a "Euro-washing" model. Under such a scenario, Chinese biotechnology assets would increasingly be licensed through European biopharma companies rather than through American firms. European sponsors could then lead development programmes, manufacturing efforts, and regulatory pathways into U.S. markets. In such a model, Chinese innovation could still reach American markets, but U.S. biotechnology firms could find themselves increasingly displaced from parts of the value chain. 

In this scenario, European biopharma companies could emerge as major beneficiaries of the new regulatory environment, serving as intermediaries between Chinese innovation and American markets. If direct U.S. participation becomes more restricted, companies seeking access to Chinese assets may increasingly partner through jurisdictions not subject to the same constraints. This would benefit biopharmas in these “neutral zones”, while reducing the extent to which US firms participate in the resulting economic activity. 

If so, BINSA may end up reshaping global biotechnology partnerships rather than reducing them altogether. The legislation may succeed in reducing direct U.S.-China collaborations, while having a more limited effect on China's broader participation in the global biotechnology ecosystem. 

The Bigger Question

Ultimately, the real question is how the United States should respond to growing international competition in one of its strategically important industries. The central challenge for policymakers is determining whether outbound investment is the cause of declining domestic competitiveness, or merely a symptom of deeper structural advantages emerging elsewhere. Similarly, policymakers must consider whether reducing direct U.S.-China partnerships necessarily reduces China's role in global biotechnology, or whether collaboration simply shifts through alternative routes. 

If policymakers are concerned about capital flowing overseas, should the solution be to restrict outbound investment? Or should efforts focus on making the domestic biotechnology ecosystem more efficient and competitive so that investment naturally remains within the country?

How can the United States continue growing its biopharma industry while facing increasing competition from abroad? How can it maintain a productive yet competitive relationship with China's growing biotechnology sector? 

As China's biotechnology industry continues to grow and geopolitical tensions continue to evolve, these questions are likely to become increasingly difficult to ignore.